Explain the term REIT. State the major difference between REIT and Mutual Funds.

The Real Estate Investment Trust (REIT) is an investment vehicle that invests in rent-yielding completed real estate properties which has the potential to transform the Indian real estate sector. REITs help attracting long-term financing from domestic as well as foreign sources, thereby improving fund availability to real estate developers and reduce some burden on completed assets by allowing owners of such assets to raise capital from investors against issue of units. Further, for the investors, the REIT can provide a new investment vehicle with ongoing returns, elevated transparency and governance standards. Difference between REITs and Mutual Funds Basis REITs Mutual Funds Meaning A REIT is a corporation, trust, or association that invests directly in real estate through properties or mortgages. REITs are traded on a stock exchange and are bought and sold like stocks. Mutual funds are professionally managed pooled investments that invest in a variety of vehicles, such as stock and bonds. Investment A large amount of funds to be shelled out if one wishes to invest in real estate. Mutual funds require small amounts to be invested. Diversification An Investor can invest only real estate related stocks through REITs. Mutual funds, however, allow to diversify the portfolio by investing in various sectors. Legal The SEBI (Real Estate Investment Trusts) Regulations, 2014 applies to REITs The SEBI (Mutual Funds) Regulations, 1996 applies to Mutual Funds